By Frederick A. Fisher, MS CFP®
As fall greets us, so do the commercials for the year-end clearance sales for the major auto manufacturers, both foreign and domestic. Are you in the market for a new car? If so, now may be the time to act to find deep discounts and free extras. Car dealers and manufacturers are motivated to make room for the incoming 2016 models.
While buying a new car can be exciting and fun, it can also be stressful and painful. On the one hand, you get to test drive new cars until you find the one you want. On the other hand, you have to go through the sometimes painful experience of negotiating with the salesperson.
Many people don’t know this about me, but I actually worked as a car salesman almost 30 years ago. Not all that much has changed in the auto industry, especially in the sales process. During my time as a car salesman, I learned a thing or two about how the business works and I want to pass along some helpful tips to help my clients make the car buying experience less stressful and more enjoyable:
1. Do Your Homework Online
It’s beneficial to do as much research as possible online before you start your negotiation. Take your time to research the car, available options, finance rates, and trade-in values, if applicable. It’s critical to put time into researching which models you can afford which car best fits your needs, wants, and budget ahead of time. This will help you recognize a good deal, know when to walk away, and not get talked into to a model that doesn’t fit your needs.
2. Buy The Car, Not the Deal
Often, car buyers get wrapped up in the negotiation and make decisions based on the overall package offered. It’s important to remember that you will spend every day driving the car, so you shouldn’t buy it unless you love the design, feel, color, performance, and options of that particular car. I’ve seen folks compromise on the car to get a better deal and drive away with a car they are not excited about, which they’ll be reminded of daily.
3. Be Willing to Walk Away
When you know your bottom line regarding what a car is worth to you, you won’t be at risk of buyer’s remorse. If you are a qualified buyer offering a fair price, the salesperson will come around if they worry you’ll go to another seller. By being willing to walk away and come back another day, you gain the upper hand in the negotiation.
4. Don’t Forget All the Extra Costs
Remember to include in your price considerations tax, license, and extended warranties, as these extras can add 10% to 15% to the sales price. Many buyers forget to include these costs and end up with a total price they are uncomfortable with.
5. Play the Game
If possible, see if you can view the sales board in the manager’s office. If it has been a slow day or it’s near the end of the month, they will likely be more willing to move a car to get another unit out. Knowing this information will play to your advantage and help you get a better deal if you’re prepared to buy that day.
Buying a car should be fun and exciting. Limit the stressful aspects by putting some time into researching online and being prepared for the negotiation process. If you follow these tips, you can get the deal you want and have fun doing it.
About Rick Fisher
Rick Fisher is a financial consultant offering comprehensive financial planning and investment management with Ostrofe Financial Consultants, Inc. in Grass Valley, California. His goal is to help clients prepare for retirement and pursue their financial dreams in a fun and personal way. Rick serves clients in 15 states, though most reside in California, including the greater Sacramento, Los Angeles and San Diego areas.
Credentials and Experience
Rick holds FINRA Series 7, 63, 65, 24, and 51 licenses and is supported by Ostrofe Financial Consultants and National Planning Corporation. He also holds his California Insurance License and the designation of CERTIFIED FINANCIAL PLANNER™ professional (CFP®). The CFP® designation is awarded to experienced financial professionals who pass an examination and pledge to abide by a strict code of ethics. He holds himself to their high standards of integrity, objectivity, professionalism and confidentiality. Please note: NPC does not render tax or legal advice.
How Rick Can Help
Rick strives to take the fear and stress out of financial planning. He works with clients to uncover financial issues they may not have known about or have not yet addressed. Rick and the Ostrofe Financial Consultants team are there to answer questions, guide clients towards their goals, and help them feel confident in their future. To learn more about how Rick may be able to help, call his office at 530-273-4425.